Oct 192016

This week Google released its latest smartphone, the Pixel, to mixed reviews. Controlling the most popular mobile operating system, Android, isn’t enough for the company.

As Microsoft found, just supplying the operating systems for smartphones isn’t enough to influence the market. Apple, along with Nokia and Blackberry before them, showed that the path to both controlling the segment and being profitable relies on having devices designed for their software.

Given the Pixel’s price point, it’s unclear how well it will do against the iPhone, Samsung’s models or the plethora of Chinese devices but for all the Android ecosystem’s players, having its controlling owner running in opposition to them can’t be comforting.

Again though Microsoft’s experience is instructive, and encouraging, for the broader Android community as Microsoft’s attempts to push out Windows CE devices failed dismally. For Google to be successful where Microsoft failed would require a degree of corporate discipline the search engine giant is not renown for.

In the Windows ecosystem, Microsoft strength was licensing and controlling access to the operating system. Android’s strength in the smartphone world is that Google doesn’t have the same veto power. To be able to exercise control over the market, Google needs a big device share.

Ultimately though the success of the Google Pixel smartphone will depend on how many users will adopt it. It may be time for another round of smartphone subsidy wars.


Sep 042016

Project Ara, Google’s experimental modular phone, seems to be doomed reports Reuters.

Sadly this isn’t surprising as the indications of Ara’s demise have been around for a year.

In some ways this isn’t surprising as Google retreated from the smartphone market at the beginning of 2014 with its sale of the Motorola handset business, the company’s notorious attention deficit disorder wouldn’t have helped the project’s survival chances either.

Should Reuter’s report be true, then Google’s management will have shown again that the company isn’t prepared to stick with long term research projects and that journalists, not to mention researchers and developers, need to treat the company’s programs with some scepticism.

For the Ara team, they’ve no doubt learned a lot in developing this project and it will be interesting to see how that knowledge is applied to other products, few of which will belong to Google.

Jul 292016

As Apple celebrates shipping a billion iPhones, the smartphone industry has entered maturity reports IDC.

The analyst firm’s latest survey of the global smartphone industry reports only 0.3% growth over the equivalent period of last year.

While both Apple and Samsung have had successes over the past year with new models, IDC believes growth now lies in shifting ‘flagship products’ at lower price points with enhanced features.

A more mature industry opens opportunities for the cheaper Chinese brands and IDC is finding those companies are unsurprisingly proving successful in emerging markets. For the established brands redefining their price points and models is going to be the challenge.

That mature marketplace is going to focus the minds of product managers, marketers and executives at all the manufacturers as capturing profit and investors’ imaginations in a mature market is very different to that when selling a new, high growth product.

Apr 032016

Are domestic appliances the next wave of connected devices? Chinese smartphone manufacturer Xiaomi hopes so.

Xiaomi is best known for its cheap smartphones aimed at third world markets and the company’s move into connected kitchen devices marks an expansion into broader areas.

Smartphones being the centre of Xiaomi’s product offerings seems to be the common factor in the expanded range of devices, with the company hoping their ecosystem will be a compelling point of difference in a crowded market.

The idea the smartphone will be the centre of people’s connected lifestyles isn’t new but Xiaomi’s bet on low margin home appliances to drive smartphone sales and subscriptions to cloud services seems a brave move.

It may work however, the business models of tomorrow look improbable today.


Feb 102016

Having written about BlackBerry’s ambitions in the marketplace for The Australian last week, it wasn’t surprising to be invited to the company’s Down Under launch of their Priv handset earlier today.

The event illustrated some brutal realities about mobile phone market and BlackBerry’s efforts to build on its strengths in the enterprise security space.

With 2.7 billion dollars of cash reserves, the company has seven years of breathing space at its current loss rates although it’s notable the stock market values the company at $3.5bn, implying investors value the business’ operations at a measly $800 million.

Given the collapse in BlackBerry’s handset business from twenty percent of the market at the beginning of the decade to an asterix today, that pessimism from investors isn’t surprising and underscores why the company is recasting itself as an enterprise security provider.

Five major acquisitions in the last 18 months have demonstrated how BlackBerry is attempting to recast its business; security services like Good Technology and Secusmart through to warning software like At Hoc have seen the company bolster its range of offerings.


Coupled with the recent acquisitions are its own longstanding messaging and secure communications services combined with the QNX software arm that promises a far more reliable Internet of Things than many of the current operating systems being embedded into smart devices.

The Android smartphone system itself is bedevilled with dangerous apps running on outdated software and where BlackBerry hopes their PRIV handset can attract enterprise users conscious of the need to secure their employees’ devices.

For BlackBerry though, the PRIV being shipped with the Android operating system is a capitulation to the smartphone market’s stark reality where there is only demand for two products and outside players like BlackBerry or Windows are destined to wither away.

While the PRIV is a nice, albeit expensive, phone and the slide out physical keyboard is nice to use, the device seems to be a desperate attempt by the company to stay in the smartphone market.

As an outside observer it’s hard to see the justification for BlackBerry continuing as a phone manufacturer, there may be some intellectual property value from the development of the devices – although it should be noted the company only valued its IP assets at $906 million in November 2015.

While the PRIV is a perfectly good Android phone it will probably be the last smartphone BlackBerry makes, the challenge for the company’s management now is to tie together the software assets it has into a compelling suite of products for the enterprise sector.

In an age where devices of all types are going to be connected, the market for ensuring their security should be huge. Catering to that market should be BlackBerry’s greatest hope of survival.

Sep 092015

Times are getting even tougher for Apple’s competitors with Taiwanese smartphone manufacturer HTC falling out of Taiwan’s main stock market index after their share price fell 66% over the last year.

Coupled with reports that Korea’s Samsung is laying off ten percent of their workforce, it’s clear the smartphone industry is by no means a license to print money.

Making matters worse for the sector, Apple will be announcing a refresh tomorrow morning which will almost certainly hurt the competition further.

For the marketplace, particularly as one as important as the smartphone market, having only one profitable supplier is not a good thing. The challenge though is for Apple’s competitors to find a way to make a profit.

Sep 042015

South Korean industrial giant Samsung is struggling, in the last year its smartphone division reported a 75% drop in revenues while their handsets, while still the world’s most popular, lost ten percentage points of market share.

The company’s smartphone division is stuck because mobile carriers in the western world are abandoning subsidies for handsets, with most developed markets now at saturation point for cellphone adoption there’s little point in chasing market growth for all but the most desperate telco.

For Samsung that’s been a problem as their premium model strategy has been based upon western consumers ordering a new phone every 18 to 24 months as their mobile contracts were renewed, now those deals are not so common a key sales channel for the Korean conglomerate has been lost.

This leaves Samsung looking for the next market and at this week’s IFA consumer technology event in Berlin, the company unveiled its Smart Things hub, a cylindrical device that connects with your TV, air conditioning, music system, and other home appliances.

Smart Things was an acquisition Samsung made last year to improve its IoT product line and the company has an open platform for connecting household devices with over 200 already certified.

For Samsung with its range of domestic equipment this may well mark the future for the business. The interesting thing though is the smartphone is still integral in today’s vision of the connected home, so we won’t see Samsung leaving the handset market soon.